Utah man pleads guilty in Putnam mortgage fraud scheme
CHARLESTON, W.Va. -- A Utah man pleaded guilty Thursday to his part in a multimillion-dollar mortgage fraud scheme involving homes in a Putnam County subdivision.
Raymond Paul Morris, 51, entered the plea to one count of wire fraud and bank fraud, marking the end of a federal inquiry into the "flipping"' scheme that has led to the convictions of six known conspirators.
Morris faces up to 30 years in prison and a $1 million fine when he is sentenced Aug. 10. A judge also may force him to pay an additional $8 million in restitution.
Last September, federal authorities released an 18-count indictment charging Morris with wire fraud, bank fraud and conspiracy, alleging that Morris was one of the leaders in a scheme to secure false appraisals for homes in the Putnam subdivision and market the homes to out-of-state buyers.
The buyers, according to court documents, belonged to a Utah investment group that Morris headed. Michael Hurd operated a front company in Utah that he used to conceal the transactions from the banks and the oblivious investors, according to court records.
Hurricane mortgage brokers Todd and Deborah Joyce conscripted appraisers Mark Greenlee and James Thornton to create the inflated appraisals of the homes. In total, the group flipped six properties in the scheme, and the respective lender losses totaled almost $2 million, according to a press release from U.S. Attorney Booth Goodwin.
Todd and Deborah Joyce were sentenced last year to 36 months and 46 months in prison respectively. Thornton and Greenlee await sentencing.
In November 2011, Hurd pleaded guilty to a separate flipping scheme that affected homes in Modesto, Calif. He admitted that he illegally flipped 20 properties there, generating more than $5.5 million in losses.
Hurd faces up to 60 years in prison and a $2 million fine when he is sentenced Aug. 10 by U.S. District Judge Thomas E. Johnston.
Morris is also the subject of a separate federal investigation.
In January, the U.S. Securities and Exchange Commission filed a complaint alleging that Morris orchestrated a Ponzi scheme that bilked investors out of more than $60 million.
The SEC complaint alleges that Morris sold unregistered promissory notes to 90 investors under the promise that the capital gained from the notes would be deposited in a high interest investment fund that would generate 20 percent returns per month for about 8 years.
During Thursday's plea hearing, U.S. Attorney Thomas Ryan told Judge Thomas E. Johnston he stipulates that Morris "is aware" of a separate criminal investigation of a Utah fraud scheme. It is not clear whether the government already has filed formal criminal charges against Morris connected to the SEC complaint.
Reach Zac Taylor at Zachary.Taylor@wvgazette.com or 304-348-5189.